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Posts tagged ‘Orders of magnitude (numbers)’

How (And Why) Banks Increased Total Outstanding Derivatives By A Record $107 Trillion In 6 Months

 

by Tyler Durden

While everyone was focused on the impending European collapse, the latest soon to be refuted rumors of a quick fix from the Welt am Sonntag notwithstanding, the Bank of International Settlements reported a number that quietly slipped through the cracks of the broader media. Which is paradoxical because it is the biggest ever reported in the financial world: the number in question is $707,568,901,000,000 and represents the latest total amount of all notional Over The Counter (read unregulated) outstanding derivatives reported by the world’s financial institutions to the BIS for its semi-annual OTC derivatives report titled “OTC derivatives market activity in the first half of 2011.” Indicatively, global GDP is about $63 trillion if one can trust any numbers released by modern governments. Said otherwise, for the six month period ended June 30, 2011, the total number of outstanding derivatives surged past the previous all time high of $673 trillion from June 2008, and is now firmly in 7-handle territory: the synthetic credit bubble has now been blown to a new all time high. Another way of looking at the data is that one of the key contributors to global growth and prosperity in the past 10 years was an increase in total derivatives from just under $100 trillion to $708 trillion in exactly one decade. And soon we have to pay the mean reversion price.

full article at source: http://www.zerohedge.com/news/707568901000000-how-and-why-banks-increased-total-outstanding-derivatives-record-107-trillion-6

S&P States the Obvious

By Ron Paul

Politicians did not get much time to pat themselves on the back for supposedly rescuing the economy with the debt limit deal last week. The ink was barely dry when Standard & Poor’s downgraded the US debt ratings anyway, roiling world financial markets.  Anyone who has taken an honest look at the government’s fiscal situation, taken into account how Washington works and the direction it is going would have a very difficult time arguing with S&P’s decision, although a strong case can be made that this was too incremental a downgrade and that it took far too long for S&P to admit the obvious.

Nonetheless, the administration nitpicked over a $2 trillion “mistake.” S&P rejoined with the fact that $2 trillion here or there hardly makes a difference in the time frame under discussion.  That, if nothing else, should tell you the magnitude of the problem.  $2 trillion has become a drop in the bucket.

full article here at source:http://www.thedailybell.com/2803/Ron-Paul-SP-States-the-Obvious

Will China Economy Boom Turn into Doom?

I came across this interesting article on china’s economy

By: Jenson

China’s trade surplus in the first half of this year fell 18.2 percent from a year ago to reach $44.93 billion. During the same period, total foreign trade value topped $1.7 trillion, up 25.8 percent year on year, with exports up 24 percent to reach $874.3 billion and imports surging 27.6 percent to hit $829.37 billion. In June, exports and imports reached $301.69 billion in value, up 18.5 percent year on year. In breakdown, June’s exports hit a record monthly high of $161.98 billion, up 17.9 percent, but the rate of growth decelerated from the 19.4-percent increase in May. Imports reached $139.71 billion, up 19.3 percent. The growth also slowed from the 28.4-percent increase in May.

China’s new bank lending shrank in May and money supply grew at the slowest pace since 2008, signifying the effects of the country’s tightening measures are paying off. New bank lending, an important indicator of the monetary policy, tumbled to 551.6 billion yuan ($84.86 billion) in May from April’s 739.6 billion yuan. The figure was also 100.5 billion yuan less than that of last May. Yuan-denominated loans outstanding at the end of May were 50.77 trillion yuan, 17.1 percent higher than a year ago. By the end of May, the broad money supply (M2), which covers cash in circulation and all deposits, hit 76.34 trillion yuan, up 15.1 percent year-on-year.

The rise of M2, following an increase of 15.3 percent in April, was the the slowest growth since November of 2008. May was the third consecutive month that the country registered slower M2 growth. The narrow measure of money supply, cash in circulation plus current corporate deposits, rose 12.7 percent from a year earlier to 26.93 trillion yuan. The increase was 17.2 percentage points lower than the same period of last year.

 

Read full article at source:http://www.marketoracle.co.uk/Article29172.html

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